Nearing Deadline Again, S&D Review Still Searching For Consensus

12 December 2002

After a gruelling ten months of meeting in special sessions as part of its mandated review of special and differential treatment (S&D) provisions, the WTO's Committee on Trade and Development (CTD) met on 2- 3 December to consider the first draft of a report that must be submitted to the WTO General Council by 31 December. While Members expected the draft to be circulated on 29 November (see BRIDGES Weekly, 28 November), difficulties in reconciling the divergent positions postponed its release until 3 December (TN/CTD/W/25, searchable at http://docsonline.wto.org). Despite this delay, the draft did not make "clear recommendations for action" -- as mandated in the Doha Decision on Implementation -- but rather gave three options for moving forward, indicating the inability of Members to find consensus on the issue. As a result, Chair Ransford Smith (Jamaica) was forced to request a postponement of this item to the end of the final General Council session of the year (10-14 December, see related article this issue) to continue consultations, in hopes of finding a solution. As BRIDGES Weekly went to press, Members were still considering an 11 December Chair's draft decision.

Having already missed a mandated 31 July deadline on S&D, Members postponed the date to report to the General Council "with clear recommendations for a decision", on a review of "all special and differential treatment provisions [...] with a view to strengthening them and making them more precise, effective and operational." to 31 December 2002.

The crux of the divergence

The last ten months has been bogged down in the consideration of, inter alia, agreement-specific proposals, cross-cutting & institutional issues, the establishment of a 'Monitoring Mechanism', and technical and financial assistance.

Most developed countries have been unwilling to accept any proposals that would either change the language of the WTO Agreements (arguing that the CTD special session is not a negotiating body) or change the 'balance of Members' rights and obligations'. They have recommended that most of the proposals be sent for further 'examination' to the subsidiary bodies that are responsible for the issue area of each respective proposal.

The large majority of developing countries, however, have been demanding that, as per their interpretation of the Doha mandate, all the individual S&D provisions must be reviewed and operationalised by the CTD first and foremost. Only then would some be willing to consider moving ahead with the cross-cutting items (which many feel have no mandate at all). Most have been averse to referring proposals to subsidiary bodies, reportedly citing a lack of resources to follow these issues in such a dispersed manner, as well as fearing a similar fate as has occurred with many 'implementation-issues' that followed a similar route (i.e. experiencing little or no movement; see related General Council article this issue).

The draft report

Despite a fierce schedule of informal consultations leading up to the release of the first draft (see BRIDGES Weekly, 28 November), Chair Smith was only able to issue an inconclusive draft report with three options for action on the S&D mandate and an empty annex entitled "Agreement- Specific Proposals on Which Recommendations for Clear Decision Could be Made by December 2002". The draft essentially recognises that Members’ positions diverge on almost all issues raised and that the need for more discussions persists. It contains three options for consideration:

Option one offers that "Members could not agree on whether or what recommendations to make on further work" and requests "direction" from the General Council (GC). Option two states that a "significant amount of work remains to be done" and asks the GC to take note that the CTD has as yet been unable to fulfil its mandate -- requesting an extended deadline to do so (however no deadline is suggested). Option three proposes the continuance of "its analysis and examination of Agreement- specific proposals and issues", ordering them into three baskets.

Option three's initial basket is those proposals on which recommendations may be possible in the short-term and/or which have support but require "process-related" assistance from other bodies. The second basket involves those proposals on "which substantial work is required to be carried in the CTD" post-January 2003 (no suggested timeframe given). The third is those proposals where the CTD special sessions could benefit from "ongoing discussions in other bodies, since either the issues raised are already under consideration in those bodies, or because it would be difficult to take a decision in isolation of the ongoing negotiations in those areas" (again, no timeframe suggested). Based on this option, the CTD would decide (presumably in early 2003) how to group the 85+ proposals before it into the three baskets. Work would continue concurrently on cross- cutting and institutional issues, incorporating S&D into the architecture of WTO rules and a Monitoring Mechanism for S&D.

Of note, option three offers that the General Council would decide on the timing of the entry into force of the Mechanism, only after the special session had made recommendations on its "functions, structure, and terms of reference". This, speculated one trade expert, could allow developing countries to ensure that the Mechanism monitors the outcome of the Doha mandate, as opposed to developed countries' demands to have the General Council begin monitoring developing countries' use of S&D in early 2003 (see BRIDGES Weekly, 28 November, link above).

Reactions to the draft report

Most developing countries favour the first option of stating that Members could not agree on recommendations. They argue that this option best demonstrates how little progress has been achieved, and does not force them to allocate further negotiating resources in early 2003 to what they view as a fruitless exercise. Developed countries and a few middle-income Latin American developing countries favour option three, which they perceive as more constructive and representing what one source termed "perceptible progress".

To that aim, a non-paper has been circulated -- allegedly from the US, EC, Canada & Japan (the 'Quad') -- suggesting items for possible agreement before the end of the year. The non-paper reportedly proposes action on some variations on 27 of the 85+ proposals currently on the table, and touches on issues such as investment measures, services, dispute settlement, technical barriers to trade, and sanitary and phytosanitary measures (SPS). Key developing countries are said to have deemed concessions forwarded by the Quad document as "insufficient". Additionally, developing countries have raised concerns that the non- paper has "no parentage", in that it has not been attributed to any country -- as are most submissions (non-paper or otherwise). One developing country delegate conjectured that this is because the non- papers' authors are concerned that if the non-paper is attributed to the Quad, it could be used to muster negative public opinion as to the sincerity of the often-touted Doha 'Development' Agenda. As a result of their concerns regarding the source of the non-paper, developing countries reportedly declined Chair Smith's request to modify it into something acceptable to them.

Despite plurilateral consultations with ambassadors after the circulation of the first draft on 3 December, little movement has since occurred. Sources indicate that the 11 December Chair's draft report, which looks at 22 agreement-specific areas, was rejected by many developing countries, in particular by the African and least-developed country (LDC) groups.

The next informal CTD consultation is to take place on the afternoon of 12 December where, as one developing country delegate put it, "Smith will to try and sell the draft to the Africans". Sources indicate that should no breakthrough come about before the end of the 10-14 December General Council (GC) meeting, Smith will request an adjournment for further consultations next week. If agreement is still not reached, the GC is expected to reconvene on 18 and 20 December, with a CTD special session scheduled for 19 December.

BRIDGES Weekly Trade News Digest will provide an update on the outcome of this process in forthcoming editions.

A number of new submissions to the CTD special session can be found at http://docsonline.wto.org, including the Chair's report to the Trade Negotiations Committee (TN/CTD/5); a response from Egypt on a Canadian SPS Proposal (TN/CTD/W/24); a Canadian submission on 'moving forward (TN/CTD/W/22); another Canadian submission on the objectives of S&D (TN/CTD/W/21); a formal submission of the EC's initial non-paper on 'ideas for the way ahead' (TN/CTD/W/20); and a follow-up EC non- paper on the S&D work programme, viewable at: http://trade-info.cec.eu.int/europa/2001newround/comnr_wtos.pdf.

ICTSD reporting.  

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